You need health insurance

Whatever your situation is, whether you are switching jobs, your employer is no longer offering health insurance, you graduated college and are no longer eligible under your parents insurance, or you haven’t had health insurance in years, this article is for you.

1. It will save you money. The truth is, medical costs are astronomical. By paying a reasonable monthly premium you would save yourself thousands, possibly tens of thousands, of dollars should you ever need medical treatment.

2. Peace of mind. Even if you are a healthy individual,*accidents do happen. Wouldn’t you feel better knowing you are covered should you ever need to be?

3. Discounts. Having health insurance can also offer you discounts, especially with covering those ever increasing prescription costs.

4. Avoid preexisting conditions exclusions. Continue treatment of those chronic conditions that could become known as preexisting conditions should you lapse without health insurance for too long (in many cases as little as 63 days). If you are between jobs and are waiting for that next job to offer you health insurance, be aware that any condition you had before may not be covered. However, you can safeguard yourself against this by continuing to have health insurance during that time. According to HIPPA (the Health Insurance Portability and Accountability Act), a health insurance plan must cover preexisting conditions of individuals if the individual was covered for twelve consecutive months ending no more than 63 days before.

5. It’s affordable and fits your needs. Now is time to get individual health insurance. It is often less expensive than group health insurance and can be designed to fit your personal needs. There are many a la carte plans as well as Health Savings Accounts (HSAs) that can give you all of the coverage you need with tax benefits as well.

Do yourself a favor and don’t wait until you have a health problem to get health insurance. It is very possible that your request could be denied or coverage could exclude the very problem you were looking to cover. Health insurance is easily accessible and available to you right now. Make the choice that will offer you peace of mind and keep your money in your hands.

What is individual health insurance?

Individual health insurance is coverage that a person buys independently. It can be sold to a single individual, to a parent and dependent children, or to a family. The majority of Americans get their health insurance coverage through an employer or through a government program, but five percent of the population purchases private health coverage on an individual basis. Each state separately regulates how individual policies may be marketed and sold.

How can I buy individual health insurance coverage?

In almost every state, individual health insurance coverage can be purchased through licensed health insurance salespeople known as agents or brokers. Independent agents and brokers sell insurance plans from many companies, and they can help you find the coverage that best suits your individual needs.

Agents and brokers also provide service on the policies they have sold, and can help you process claims or with anything else you need regarding your policy. The insurance companies for which agents and brokers sell coverage pay them a commission for their work, so you will not be charged a direct fee if you want to use the services of an agent or broker. You can find agents and brokers who sell individual coverage via the Internet, or you may prefer to consult with one in person.

How is individual insurance different from group insurance?

Individual health insurance is very different than group health insurance, which is the type of insurance that is offered through an employer. Since laws mandating what types of services must be included in individual policies are often different than those dictating what must be included in group policies, benefits are generally less extensive than what most people would receive through coverage they have through work. Individual consumers may be surprised to learn that some benefits that may be considered “standard' in a group policy, like maternity coverage or substance-abuse treatment, may not be included in an individual plan. Sometimes individual health insurance consumers have the option to pay extra for coverage of additional services like maternity coverage. This extra coverage is referred to as an optional rider.

Cost is often the primary factor for individual health insurance consumers, which is another reason why the benefits included in individual policies are often simpler. In addition, deductibles (the amount you have to pay before insurance benefits begin) and cost-sharing (the fees you pay directly to medical providers at the time of service) are also generally higher.

Individual health insurance companies are much more limited than group insurance companies in their ability to spread risk, so the laws concerning i ndividual health insurance are different in most states. This means that applicants for individual insurance will need to complete a brief medical questionnaire when applying for benefits and, unlike a group insurance policy, in most states a company can decide not to cover people with very serious medical conditions (e.g., HIV or cancer), deeming them “uninsurable.”

How are premium rates determined?

In the vast majority of states, when you apply for individual health insurance coverage, you are asked to provide health information about yourself and any family members to be covered. When determining rates, insurance companies use the medical information on these applications. Sometimes they will request additional information from an applicant's physician or ask the applicants for clarification.

If the insurance company is unable to obtain information necessary to accurately determine the risk of a particular applicant, it will underwrite more conservatively, meaning that the assumption relative to the missing information will be negative rather than positive.

Example: A person has a history of high blood pressure, but it is controlled with medication and he is not overweight. If the company is unable to determine if that individual smokes or if he has normal cholesterol, the company will assume that the missing information is negative and rate accordingly.

Once the company has determined your health status, you will be assigned a rate class by the company and put into a pool of other insured individuals with similar health status. Your premium will be the rate charged to that entire class of customers. Subsequent annual renewal premium rates will be determined not by your individual claims, but instead by the claims experience of the entire rating class pool.

Are any pre-existing medical conditions covered?

Even though in almost every state an individual insurance company can choose not to offer coverage to people with serious medical conditions, most Americans don't have perfect medical histories and most still qualify for individual coverage. However, there are some individuals who do not decide to purchase health insurance coverage until they know that they have a medical problem that will require the use of benefits. This is known as “adverse selection,” and it can be a serious problem for individual market insurance companies since their ability to spread risk is so limited.

To help prevent adverse selection, insurance companies are allowed to look back at your medical history for pre-existing conditions and may choose not to cover certain conditions for a specified period of time. This is known as an exclusionary, or pre-existing condition, waiting period. The amount of time an insurance company can look back at your medical history, and the length of time an exclusionary period can last, vary on a state-by-state basis. In some states, you can receive credit against a pre-existing condition waiting period if you have had prior health insurance coverage within a specified number of days. The amount of the credit against the waiting period is generally proportional to the length of the prior coverage.

Also, many states allow health insurance companies to issue elimination riders to people who have pre-existing medical conditions. Elimination riders allow for insurance companies to offer an individual with preexisting condition coverage but exclude coverage of that condition.

Example: An individual has severe seasonal allergies but can control them with medication. A company may offer the applicant two policy options: a policy at a more expensive rate with full allergy coverage and a pre-existing condition waiting period, or a cheaper policy with no waiting period that excludes allergy coverage. The individual may find that it is more affordable to buy the cheaper policy and pay for his allergy medication out-of-pocket.